Important inventory status enhancement for manufacturers, part 1

Mar 16, 2016
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Microsoft Dynamics AX 2012 R3: Important Inventory Status Enhancement for Manufacturers, Part 1

by Evert Bos, Solution Architect, Sikich

The inventory status is a new dimension that comes with WMS, advanced warehousing, in AX 2012 R3. This is great news for manufacturers that deal with a lot of inspection, rework and Return-To- Vendor scenarios. It is even better news for manufacturers that do remanufacturing, refurbishment or overhaul.  An excellent starting point for our topic is Chapter 4 of the Warehouse Management book for AX 2012 R3 by Scott Hamilton, as well as his earlier article on the topic. From this book, we learn the following basic facts:

1. Basic facts of the new inventory status field

An item only gets an inventory status dimension when it is set up as a WMS item, which means we have a Storage dimension group that would look like this:

inventory-status-ax2012r3-1_0

As soon as I click "use warehouse management process" in this screen, I will get the active dimensions Location, Inventory Status and License plate" and none of them can be un-checked! (sorry for those of you who had the audacious, but misguided idea to use Advanced warehousing without locations!)

Here is something that may come as a revelation to some: I can use this item in regular warehouses! In that case the license plate dimension is not active but my inventory status is available! This is critical news for manufacturing companies that are project- based and do not really need the WMS functionality. But they probably want to use that inventory status. The scenarios described below all work for a regular warehouse also, albeit with sometimes a subtle difference in functionality that will be explained later in this article.

A company parameter is set that indicates the default inventory status for all items in the company. This would always be "available" or a similar designation. A site can have a default inventory status.

A WMS warehouse can have a default inventory status. A regular warehouse allows a default inventory status also but it will not have any effect. A default inventory status of a warehouse can never be one that has "blocked" checked. The WMS warehouse default inventory status will pop in for any item that is about to have new inventory received into that warehouse. It also works for the Quantity adjustment transaction and for journals. It is unclear what the site default inventory status is doing. It seems un-necessary.

The user can create as many inventory statuses as desired. If we don't want to use inventory status, we just create one, called "available". An inventory status can create a "blocking" transaction or not, see below.

inventory-status-ax2012r3-2

It is important to know that when a status with blocking is chosen in whatever "receiving" transaction (purchase order, production order, any inventory adjustment) the system immediately creates a blocking record in "inventory blocking", see below.

inventory-status-ax2012r3-3

The blocking type tells us what causes this blocking.  The "expected receipts" box is not checked which means that the system expects this blocking to lead to a scrap. My blocked quantity is not seen by MRP, so it will not appear in "Net Requirements".  (NOTE: A quality order, in contrast, always has the "expected receipts" box checked, the blocked quantity will be seen by MRP).

These blockings will automatically disappear as soon as the item status of this quantity of this item changes to "available" again.

2. Inspection scenario with Quality orders using inventory status

For WMS-enabled warehouses in AX 2012 R3, Quarantine orders can no longer be used.  If we try to create a Quarantine order for a WMS-enabled warehouse, we will get the error below.

inventory-status-ax2012r3-5

It is clear we need a new type of inspection scenario using Quality orders when we use WMS warehouses. We can receive Purchase orders that have to be inspected using a special value of the inventory status.

There are two ways of doing this: either we receive into a special warehouse that has the inventory status default "needs inspection" or we manually change the inventory status to a value "needs inspection", using registration, just before receiving.

Let's assume we have a Quality Association set up that creates an automatic Quality order right after receipt. This quality order will contain a sample quantity of our received item with the inventory status "needs inspection". (Unfortunately we can't use the inventory status dimension in the Quality associations yet).

Here comes the exciting part: in the quality order functionality, the Test group is the list of tests we need to perform. In R3, this test group contains new parameters that control automatic inventory status changes during validation, see below.

 

inventory-status-ax2012r3-6

The General tab of the test group allows us to define the status change for failure and for passing inspection! This is a cool new feature! A quality order using this test group will make the status change for the quantity that is being inspected. It will do this during validation of the quality order. During validation the system will determine whether we have a pass or a fail for the quality order. The validation screen has a checkbox to control the status change.

inventory-status-ax2012r3-8

When the warehouse is WMS-enabled, the "conversion" of the inventory status will take place but it will convert the total quantity in the location, ignoring the parameter setting on the location profile that should allow different statuses in the same location.

inventory-status-ax2012r3-9

It also works for regular, non-WMS warehouses but there is the similar caveat: you have to make sure that the quantity in the quality order is the full quantity in the location. If not, you will get the error below. Locations in a regular warehouse don't have a location profile so there is no parameter that controls the presence of mixed statuses in the same location! Yet the system is programmed to not allow a mixed status in a regular location in a regular warehouse.

inventory-status-ax2012r3-10

 

In Part 2 we will talk about rework production orders, direct conversion of status without a business transaction, and a few remarks about remanufacturing/refurbishment industries

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